The West isn't best (1992)

From the February 1992 issue of the Socialist Standard

With the recent collapse of the former Soviet-dominated bloc in Eastern Europe and then of the Soviet Union itself, it could have been expected that the advocates of private-enterprise capitalism would have rejoiced at the apparent triumph of the “free market”. But despite the best efforts of some sections of the media, the celebrations have been unmistakeably muted.

Having proclaimed that the “collapse of communism" showed the strength and invincibility of Western-style capitalism, the John Majors and George Bushes of this world have rather been left with egg on their faces. For not only has the last year proved beyond doubt the manifest failure of the state- capitalist bloc in the East, it has laid bare the current economic mess of the capitalist states in the West.

Far from demonstrating the prosperity and economic superiority of the USA, Britain. Germany and Japan, the capitalist system has ushered in probably the worst slump since the Second World War. Industrial production is not just falling in Russia—it is falling in the supposedly “successful” capitalist nations too.

Growth

Why, then, has fate seemingly conspired so cruelly against the Western politicians who could now be expected to be enjoying their hour of glory? To understand this, it is necessary to understand why, for some periods at least, output and growth are able to expand in capitalist society.

In the capitalist system of production, economic growth appears in the form of the accumulation of capital, capital being a sum of values invested in the means of production with the object of creating further value. The accumulation of capital is the driving force of capitalism and crucially depends on the creation of a surplus value in the production process by the working class (that is, value created by workers in excess of that received back as wages and salaries), together with the realisation of that surplus value when the commodities that have been produced are sold on the market. Surplus value is then divided between the various sections of the owning capitalist class as ground-rent, interest and profit.

Though the capitalist class receives a privileged income because of its ownership of capital, it would be a mistake to think that this is the principal reason why capital is invested to expand production. Part of the surplus value created by the unpaid labour of the working class is of course, consumed by the capitalists in the form of luxury goods and so on, but a significant part is transformed into additional capital and is re-invested in production, to buy raw materials, plant and equipment and the working abilities of wage and salary earners.

Competition provides the general motive force for the accumulation process, and enterprises must accumulate capital as rapidly as possible if they are to survive. This involves maximising the surplus value wrung from the working class and producing commodities as cheaply as possible by increasing the productivity of labour through mechanisation, robotics and the like.

So long as capital is able to accumulate in the hands of the capitalist class, re-investment occurs and production expands. More value is created by the working class, more commodities are sold, more profits are made and the additional capital re-enters the production process and serves to expand production and output further. However, as the history of capitalism has repeatedly demonstrated, this process is in practice always interrupted sooner or later.

Slump

Points periodically arise—corresponding to the onset of an economic crisis—when the circulation and accumulation of capital is severely disrupted. Enterprises find that they have over-accumulated and over-expanded their operations for the particular market they are selling to. Commodities cannot be profitably sold and the surplus value embodied in them is unrealised. Further accumulation of capital and reinvestment in production is thus at the same time rendered both more difficult and less worthwhile.

Often, this process of “over-accumulation” occurs in industries producing consumer goods, with enterprises responding to favourable price signals flooding the market with more commodities than can be profitably sold. A halt in investment then takes place, which can spread quickly to those sectors of the economy that have been supplying these consumer goods industries with producer goods such as, say, machinery and robotics equipment, commodities not intended for consumption but for the production of other commodities.

In this way the economic crisis can become generalised and a slump can set in. At other times the drive to rapidly accumulate capital will lead to a disproportionate growth in some of the producer goods industries themselves and the economic down-turn will spread from these sectors of the economy. An over-accumulation of capital in key producer goods industries will lead to an overproduction of producer goods and the likelihood of real wage cuts for some workers and redundancy for others, this leading in turn to a fall in demand for consumer goods.

So, although the accumulation of capital provides the spur for wealth creation and growth under capitalism, capital accumulation occurring within the context of capitalism's unplanned and anarchic production process leads to key—and previously profitable industries over-expanding, causing cutbacks in production and unemployment. After a (possibly prolonged) period of stagnation, a destruction of stocks and a gradual devaluation of capital take place, helping to provide the conditions for further accumulation to take place and for a recovery from the slump

The accumulation of capital has also been at the heart of the problems being encountered in Russia which formerly operated a form of bureaucratic. centralised state-run capitalism. Once this dictatorial state capitalism had forced peasants off the land and into the factories as wage labourers earlier in the century, it proved to be a grossly inefficient basis for the further accumulation of capital.

Partly because of its in-built mechanisms for diverting capital to stagnant areas of production that should have been purged from the system, and partly because of the resistance of the working class to productivity speed-ups and other methods for increasing the rate at which surplus value was produced, the state-capitalist economies eventually stagnated. Indeed, they suffered not so much from a crisis of overproduction as a slowly-developing crisis of generalised stagnation and relative under-accumulation. Average rates of profit and the capital available for further investment fell dramatically. Countries such as Russia are now going through a painful process to restore an acceptable rate of accumulation through the destruction and devaluation of inefficient plant and machinery, with large-scale unemployment and massive real wage reductions for the working class.

The lesson from this is clear: whichever way capitalism is operated, economic crises and slumps will inevitably occur, not because of the foul-ups of politicians but because of the internal dynamic of the system itself. That is a sobering thought indeed for Yeltsin. Bush, Major and all the would-be “managers” of capitalism across the globe, as East and West, world capitalism stagnates in a deepening slump.

Dave Perrin

"Dead Right" (1992)

Cartoon from the February 1992 issue of the Socialist Standard

Letter: IQ tests and racism (1992)

Letter to the Editors from the February 1992 issue of the Socialist Standard

Dear Editors.

A brief (and inadequate!) response to your somewhat misleading article dealing with "intelligence testing" (‘We Are Not Inferior', Socialist Standard, November 1991).

There is a long tradition among traditional “socialists" that rejects IQ testing. Stalin banned IQ tests in 1935 on the grounds they were grounded on “bourgeois ideology"; Hitler made them illegal at the same time because of their “Jewishness”. (In numerous studies, the largest in Glasgow, Jews do significantly better than Gentiles—hardly a finding to endear the procedure to the Fuhrer!). And now, the Socialist Party has to put in its two pennies-worth, arguing that the social scientists who support the concept of IQ arc racist and anti-working class.

The racist argument just doesn’t stand up. Both Eysenck (a Jewish refugee from Nazi Germany) and Jensen have repeatedly drawn attention to the fact the Japanese and Chinese, individually, whether tested in their own countries or as American immigrants, do better on blind IQ tests than do their white counterparts—but nobody accused the researchers as advocates of yellow supremacy! And, yes, they also report that literally hundreds of tests of black and white Americans have found that the former score lower (although. ironically. Jensen found that blacks perform relatively better on the more culture-loaded verbal tests!)

Likewise, the IQ advocates cannot be accused of arguing that the working class is "innately inferior”, as your writer suggests by repeated references to Herrnstein. Indeed the logic of statistical repression theory, fundamental to an understanding of Eysenck and his colleagues, is exactly the opposite to a "genetic" justification of social class division in society.

As Eysenck puts it: 

  Regression is intimately connected with social mobility. In Western societies, only one person in three retains the social class of his or her parents. The major determinant of this upward or downward movement is IQ. When we look at children of a given family, we find that the brighter ones rise in the social scale and the duller ones drop despite the same education, socio-economic status and home background . . . (Intelligence: The Battle for the Mind. Pan Books 1981, p64)

Contrary to your writer’s assertion, the overwhelming majority of psychological researchers base their theoretical work on the biological basis of human behaviour. We have all met unfortunate individuals born with damaged bodies/brains and consequently limited in their abilities. Only simplistic thought imagines that the handicapped are qualitatively different from the rest of us: we all form an extended continuum. What we are and what we may attain is determined firstly by the genes we inherit from our parents and secondly by environmental factors (especially “educational”— especially in the critical first years of life).

If we reflect upon the great number of genetically determined characteristics and potentialities that vary between major racial groups— body size and proportions, cranial shape and size, hair and eye colour, number of vertebrae. fingerprints, bone density, age when we cut teeth, blood groups, colour blindness, diabetes. depression. schizophrenia—wouldn't it be truly amazing if genetically-conditioned mental traits were a major exception?

When Karl Marx suggested for socialism the slogan "from each according to his abilities, to each according to his needs” he was, as a disciple of Darwin, acknowledging the importance of genetic factors.

This is why IQ tests, for all their failings (and let’s be under no illusions, psychologists do not even have a universally agreed definition of the multi-dimensional construct "intelligence"!) can be a valuable tool for identifying "problems" children are likely to experience as they travel through the vital "learning years”. Knowing each individual's strong and weak attributes can help the teacher devise an appropriate learning environment.

Bob Potter 

Hove, East Sussex

Reply:

Bob Potter should re-read the article in question and he will find that we did not say that all who support the use of IQ tests are racist and anti-working class. What we said was that racists have been able to use IQ tests to back up their views since the term "intelligence quotient" misleadingly suggests that what the tests measure is "innate intelligence".

Differences in IQ Test scores between so-called "racial groups" (which are in reality cultural groups) are to be explained by the groups' different opportunities to learn to do and/or by their different attitudes towards what is being tested. Thus the high scores of people from Jewish. Chinese and Japanese backgrounds is to be explained in terms of their group's particularly favourable attitude towards intellectual achievement rather than to genetic factors. Similarly. the better scores Bob Potter mentions of American Blacks on verbal tests are due to cultural factors amongst this group favouring verbal expression.

We criticised people like Jensen and Eysenck for suggesting that biological factors related to "race" were at work in such cases. Clearly different human beings do have different abilities—as is indeed implied by the old socialist slogan "from each according to their abilities, to each according to their needs"—and some of this at least will be due to their different individual genetic make-up. But. frankly, since our correspondent asks, no, we don't think it likely that this will be found to be linked to factors such as skin colour, head shape, blood group or big toe size.

Editors

Nationalist Myths (1992)

Book Review from the February 1992 issue of the Socialist Standard

National Identity By Anthony D Smith. Penguin. £5.99.

This book begins by defining a nation as “a named human population sharing an historic territory, common myths and historical memories, a mass, public culture, a common economy and common legal rights and duties for all members”. Smiths view that nations are based on “common myths" is something that socialists can certainly go along with, one of the most common myths of all being that a nation is a homogenous unit whose members share a "common economy" or have a fundamental identity of interests.

Unfortunately. Smith has little conception of the antagonistic class interests masked by the division of the world into nation-stales and comments that “nationalism provides the sole vision and rationale of political solidarity today . . . all other visions, all other rationales, appear wan and shadowy by comparison". In recognizing that nationalism has some negative as well as positive aspects for the capitalist world order. Smiths preference rests on a vague hope for a developing pan-nationalism in Europe Arabia and other parts of the globe that could provide a form of "collective identity" while serving to diminish social and political instability caused by national conflicts.

But what this shows is that Smith has failed to comprehend the role of nationalism—not as some autonomous or independent source of instability—but as a product of the competition and rivalry inherent to the capitalist system itself. It was as such that modern nationalism developed in the late eighteenth and nineteenth century as a challenge to the decaying old feudal empires. Then it was part of a progressive movement, a movement towards independent liberal-democratic capitalist states at the expense of feudalism and absolutist government. Indeed at that time some early socialists like Marx and Engels did support some movements for “national independence" and "self-determination for nations" as a way of hastening the development of capitalism and so providing the economic preconditions for socialism.

In the twentieth century the situation has been vastly different. Capitalism succeeded long ago in sweeping away the old feudal restrictions and has now become a world system with a global market for commodities and an international division of labour. All of the world’s nation-states are capitalist and all seek to defend the interests of the sections of the capitalist class operating from within their borders, whipping up nationalist fervour one minute while trampling on local cultures and traditions the next, and periodically sending their wage slaves in uniform to die in bloody battle on the capitalists' behalf. Nationalism and "national liberation", as ideologies serving the interests of differing sections of the ruling class, now stand as barriers in the way of the progressive movement which seeks to establish a real world human community without class division and national frontiers on the basis of the potential economic abundance made possible by capitalism. That movement of course, is the movement for world socialism, and Anthony Smith might have done well to acquaint himself with it before writing this book.

Dave Perrin